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Finance Bill 2016 Analysis

Finance Bill 2016 Analysis

On 8 June 2016, the Cabinet Secretary for the National Treasury presented the 2016/2017 Budget to the National Assembly. As is now customary, the Finance Bill which actualises the revenue measures in the budget was gazetted on 10 June 2016. However, the Finance Bill 2016 was only availed to the public on 16 June 2016. This creates a peculiar scenario where some tax measures take effect retrospectively, an issue that has led to disputes with the revenue authority in the past.

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While the introduction of the Tax Procedures Act in January 2016 significantly simplified the tax legislation, it contained a number of errors which called into question the legality of a number of tax measures such as withholding VAT and the tax amnesty on rental income. The Finance Bill 2016 includes measures to anchor these provisions in the law and to remove duplications in the Tax Procedures Act and the other tax provisions.

The changes in the Finance Bill 2016 also reflect the government priorities which include tax incentives for low income housing developers, promotion of special economic zones, increased revenue mobilization through changes in the excise duty rates for various products and measures to strengthen the financial sector.

KPMG has analysed the Finance Bill 2016, providing insights into the implications of the various changes to taxpayers. You can access the analysis using the link below.